Dominant development discourse holds that water scarcity reflects geophysical limitations, lack of infrastructure or lack of government provision. However, this paper outlines the ways in which scarcity can only be fully explained in the context of development, specifically, neoliberal economic policies and related notions of good governance. Water is Lesotho’s primary natural resource, yet many of its inhabitants remain severely water insecure. Presently, decentralization and Integrated Water Resource Management (IWRM) are embraced in Lesotho as a philosophy and method to engage varied stakeholders and to empower community members. Using a water committee in Qalo, Lesotho as a case study, this paper explores the micro-politics of water governance. As individuals contest who is responsible for managing water resources for the village—by aligning themselves with traditional chiefs, elected officials, or neither—they transform or reinforce specific hydro-social configurations. While decentralized resource management aims to increase equity and local ownership over resources, as well as moderate the authority of traditional chiefs, water access is instead impacted by conflicts over management responsibility for water resources. Drawing on theories of political ecology and governmentality to extend recent scholarship on IWRM, this paper re-centers the political in water governance by situating local tensions within national policies and development agendas and demonstrating how scarcity is hydro-social.